With a home loan facility, purchasing a house has relatively become easier. However, if you plan to own a real estate property immediately, you may want to wait for a few days because the RERA Act (Real Estate Regulation & Development) is coming into effect on the 1st of May, 2017 in all the states across the nation. The features of RERA include the much-needed transparency and accountability which were not there earlier in real estate regulations of the government. The new Act will be quite beneficial to all the people who aspire to buy a new house.
Salient Features of the RERA Act:
RERA will mandate all the states to come up with a new establishment of a State Real Estate Regulatory Authority to manage grievances of customers of residential and commercial real estate properties. It aims to reduce real estate disputes and bring transparency in the system. It will also mandate the builders and developers to get their projects registered with the government authority whether an ongoing project or under construction. If the land pertaining to a project is 500 square meters or includes 8 or more apartments.
The Real Estate Regulation & Development Act will also mandate the developers to disclose all the details related to the project to State Real Estate Regulatory Authority and the prospective buyers. These details can include a project plan, layout, approvals obtained from the government, completion schedule, land title status, etc. It is seen commonly that developers after collecting funds from various buyers/ investors, use these funds for other projects and not to complete projects for which the money was sought, thus causing a delay in the project’s completion.
If there is any deficiency in the project, the new Act will also permit the buyer to demand the required after-sale service. This facility can be enjoyed by the buyer for a year after the possession of the property. With the new law being in force, after the sale of the plan, the developer cannot make any changes in the project plan without taking written consent from the customer. Thus, the developers won’t be able to increase the cost of the projects of their own will.
Other Regulations in the RERA Act
- The developers/ promoters will have to register each and every phase of the construction project. This will be considered as a different standalone real estate project, thus, curtailing promoters from offering the sale of apartments even before the project launch.If anyone fails to register the project, a penalty of up to 10% of the project cost may be levied. In case of any repeat of mistake/ negligence, the concerned builder and developer can face a jail term.
- With RERA developers will be required to deposit 70% of the money collected from buyers in a separate account which can be only utilized for the same project for which the funds were collected.
- RERA will mandate developers to define the carpet area in a very clear manner so that there may not be any type of misquoting of the same.
- In case any developer/ builder breaches the orders of the appellate tribunal of RERA, a punishment of imprisonment of a maximum of three years may be given along with the imposition of a subsequent amount as a fine.
- Any type of delay in the project does not penalize the developer in the current scenario but with the introduction of the Real Estate Regulation & Development Act, the developer will be liable to pay an interest that may be equal to the EMI that the buyer will be paying to the bank if a project is delayed.
The Real Estate Regulation & Development Act will take care of the buyer’s interests and make tough laws/ rules for willfully defaulting real estate players. All you need to do is purchase a residential or commercial property only after RERA is introduced. Until then, if you need a home loan, you can check your housing loan eligibility on loanbaba.com, compare banks, select and apply for the funds.